Why are more shoppers struggling to repay ‘buy now, pay later’ loans?
May 21, 2025
Short-term lender Klarna says more customers are having trouble repaying their “buy now, pay later” loans. The disclosure this week corresponded with reports by lending platforms Bankrate and LendingTree, which cited an increasing share of all “buy now, pay later” users saying they’re falling behind on payments. Some analysts see the late or missed installments as a sign of faltering financial health among a segment of the U.S. population as the nation’s total consumer debt rises to a record $18.2 trillion. Buy now, pay later plans generally split payments for purchases into four or fewer installments. Providers typically market the loans as accruing zero interest and promote them as a safer alternative to traditional credit cards.
